AFTER a decade of stabilization and gradual liberalization there is a sense of gloom in a significant chunk of Pakistan’s industrial sector, in sharp contrast to the belief that drove the deregulation reforms.

Why has growth not picked up in all sub-sectors of industry, despite no important policy reversals? Are the sub-sectors with subdued or continued slack production facing demand constraints or other structural problems in transformation, were the reforms too little too late or is the poor outcome the result of poor implementation of a well-conceived policy framework owing to political and bureaucratic inertia or simply the societal and official reluctance to change?

One school of thought within the multilateral lending institutions attributes the slowdown in growth since the second half of the 1990s to the patchy and half-hearted implementation of reforms, the need to reduce the cost of doing business in Pakistan, strengthening contract enforcement norms and further relaxation of rules governing the use of capital. These are certainly areas which require a more detailed examination and resolution.

In the opinion of this writer, the much argued claim regarding the nexus between reforms and growth is overstated. There is little conclusive evidence of a clear and positive correlation/linkage between the scope of reforms and economic outcomes. Stabilization and liberalization may be necessary but are certainly not sufficient conditions for economic growth and prosperity. The market cannot automatically resolve problems of lack of coordination and poor linkage.

For instance, while interest rates have declined, commercial banks continue to be reluctant to lend to the productive sectors of the economy and have instead chosen to invest in risk-free government paper/securities or in the stock market where close to Rs.45 billion has been invested by the commercial banks. Admittedly, this is partly because the entrenched legal environment having a bearing on foreclosure has only partially changed the incentive to lend to enterprises.

And with the president himself reminding us and the world repeatedly that he will not give up his uniform because of internal instability, it is not too surprising that foreign investors are not queuing up to exploit investment opportunities within Pakistan. Combine this with the state machinery itself not believing in the rule of law and protecting, if not actually sponsoring, a host of mafias, a judicial system not perceived to be fair, just and predictable in its decisions and you begin to see why the climate for investment continues to be poor.

There is also little doubt that what also stifles growth and efficiency are excessive bureaucratic controls over production and trade — an elaborate and highly regulated system put in place at all levels of government (federal, provincial and local) and an oversized and inefficient public sector mandated to provide key services like energy and communications. The remaining regulatory framework and control systems not only function inefficiently but also promote a perverse set of incentives. Although most of the pernicious aspects of the features mentioned above were diluted during the 1990s, the performance of the manufacturing sector has continued to be lacklustre, since much still remains to be done.

Moreover, partly in response to large public sector expenditure on development and other related schemes in the decade up to the mid 1990s, there was investment in manufacturing without a concomitant increase in production, resulting in fairly large excess capacity.

A significant proportion of the industrial sector is now up against lack of demand which is constrained by the policy framework, poor, or at best indifferent, increase in production of major crops in recent years and the slashing of public sector development expenditure since the latter half of the 1990s. In a developing and iniquitous agrarian economy investment in public infrastructure makes a key contribution to equity, growth and economic efficiency. Public investment acts as spur for private investment. International evidence also supports the argument that public involvement in infrastructure does not displace private investment but crowds it in. With interest rates on government borrowings below the rate of inflation, fiscal space exists to augment current levels of public sector spending on physical infrastructure.

The essential fact is that Pakistan continues to be a large and poor agricultural economy with almost half the working population still dependent on agriculture for livelihood, but productivity of the land is less than one-third that of China, as is the case with value addition in per capita terms in manufacturing, which is less than one-fourth that of China.

In aggregate terms there has been no slowing down of the growth in agriculture. However, there is evidence, based mainly on physical output growth at the disaggregated level, which seems to suggest a different tendency. A comparison of the yields per acre of all major crops between the 1980s and 1990s reflects the lowering in the growth rate in the 1990s, except in the case of wheat. In view of a low level of exports and lack of natural resources and inadequately developed productive human capital, industrial growth becomes a function of the size and growth of the domestic market, whose size, in turn, depends on the performance of the agriculture sector, unless, as argued above, the government steps in and increases its spending on projects with high rates of return and short payback periods. In other words, it is the lack of demand that is acting as a constraint on industrial growth.

The fact that a large proportion of the labour force is still employed in agriculture, even though the share of agriculture in GDP has fallen to 25 per cent, is a telling indicator of the failure of our developing strategy in enabling workers to move from agriculture to more productive employment elsewhere in the economy. The small average size of land holdings is also a symptom of this failure since these would have been consolidated if fewer people had been engaged in agriculture.

The writer is former finance minister of Punjab.

IT is entirely a different Riyadh — majestic, modern and mobile. Thirty years ago when I visited it, the Saudi Arabian capital was a mere habitation of small brick houses which had been retrieved from an inhospitable desert. The battle to conquer dunes of sand still goes on, relentlessly.

In the meanwhile, many Riyadh-like cities — Jeddah or Dammam — have come up in the kingdom, with new enterprises. A network of six-lane roads, which are lighted even before it gets dark, links a country of nomads, where even camel tracks were not visible at one time.

True, the earnings from huge reservoirs of oil and the toll on pilgrims for the Haj have made the development affordable to the kingdom. Yet what has made it possible is the labour from the subcontinent. There are nearly 30 lakh people, 16 lakh from India alone. They are engineers, doctors, economists, scientists, educationists or mere labourers. They are still the backbone of the country’s economy.

Surprisingly, the key to the progress as they are, they have no privileges, no security of tenure, no right to residence. They can be thrown out any time without notice. The status of the newcomers or those who came 30 or 40 years ago is the same: no legal domicile, no automatic nationality and not even temporary citizenship. All depends on the preference or the permutation of the government. It may want people from a particular country at one time and from another at some other.

Once the Pakistanis were allowed in droves. Then the Indians came to be liked. They still “sell” well because of their reputation of minding their own business and working hard. Policemen treat them with consideration. Still when it comes to having any tangible rights, the Indians are no better than the others. New entrants are few and far between as the time goes by.

I can understand if a person is thrown out for having committed an offence or for having violated even the unwritten laws of the country. Any consideration other than that is capricious. But then that is the reality. The sword of Damocles is constantly hanging over the heads of those who are working. But they have learnt to live with it.

Openings are shrinking because the Saudi youth is entering the market and demanding employment. Some of them are brilliant. But the average is indolent and wants the best of life without working for it. Even those Saudis who are below par are pushing out old hands to the background or even out of the country. I know the son-of-the-soil theory has come to prevail in every country. Yet those who have given their sweat and toil to build Saudi Arabia should have been given a sense of security in the jobs they occupy or ensured a salary for the period they would have served if they had not been retired early.

It should not, however, come as a surprise that the Americans, employed at similar jobs, have a fixed tenure and comfortable living. They draw a salary which is three or four times more than that of the people from the subcontinent. The anti-American feeling is strong, particularly after what has happened to Iraq. Still they throw their weight around and continue to enjoy a pre-eminent position.

But then New Delhi is no less dazzled by those employed in America or elsewhere in the West. The Indians in Saudi Arabia or, for that matter, the Gulf countries, proudly cling to their nationality while those living in America, the UK or Canada have jettisoned their nationality. But the latter are considered more important even as non-resident Indians (NRIs).

There was a big jamboree of NRIs last year at New Delhi without any invitee from the Arab countries or the Gulf. New Delhi’s criterion for importance is the quantum of money which the community from a particular area contributes to foreign reserves. I have no idea how large is the financial input of NRIs from the West. But the Indians from Saudi Arabia alone remit seven billion dollars every year. This is apart from the money which Air India makes because its Saudi Arabia route is the most paying.

Ninety per cent of Indians in Saudi Arabia are Muslims. It is amazing how closely they follow the day-to-day developments in their country through TV channels. With no firm future in Saudi Arabia, their main concern is: What will happen to the Indian Muslims? In one way, the question is easy to answer:

The country has a Constitution which is secular in letter and spirit. The word ‘secularism’ figures in the preamble. Individual as well as collective freedom of religion is guaranteed under Articles 25, 26 and 30. Non-discrimination on grounds of religion under Article 15 and equality of opportunity under Article 16 automatically ensure the basic principles of secularism.

In another way, the fact remains that the BJP, which has increased its strength from eight to 181 members in the Lok Sabha in the last decade, has anti-Muslim bias. The party has divided the society more in its five-year rule than the British did during their entire stay of 150 years. Still deputy prime minister L.K. Advani has the temerity to say that the “ideology of the BJP or the RSS has been a unifying factor for the nation.” How can those who want to found a state on religion, not the nation, unite the country?

But any desperation or retaliation in terms of fanaticism will be counter-productive for the Muslims. They should maintain their faith in the constitution which gives equality before the law. They should remember that wading through blood in the wake of partition and adopting a secular constitution was not easy. But what the then Prime Minister Jawaharlal Nehru said at that time was as much true as it is today:

“The government of a country like India with many religions that have secured great and devoted following for generations can never function satisfactorily in the modern age except on secular basis.”

This is what the then king of Saudi Arabia admired about India when I interviewed him many years before. Today’s government at Riyadh is no different. What is not understandable is why the government prefers a Muslim to head the Indian embassy in Saudi Arabia. Ours is a secular country and our diversity is the country’s strength. Singling out any religious community for representation gives a handle to communal elements.

“Do you have freedom,” I asked one of the Indian friends at Riyadh. He said it all depended on what was meant by freedom. “My wife, wearing jewellery, can travel all by herself throughout the country even at night,” he said. “Nobody would even imagine that any harm would come to her. Compare this with India which has all the freedom.”

My friend was right in one sense. The security of life and property was important. Still the freedom of expression is something basic to human beings. It is heartening to see that Saudi Arabia is holding elections for setting up its first municipal council.

With all the luxuries, the say of the people is necessary. Man does not live by bread alone.

The writer is a freelance columnist based in New Delhi.

IS our aim to prevent war or to pre-empt apparent threats? There is an important difference; not just in the semantics. In Bush-speak pre-emption may mean taking military action in order to avoid some presumed catastrophe looming over the political horizon.

Preventing war means taking some bold, resolute action, short of war, to try and remove the probable cause of belligerency. Actually the US can and does do both, despite the presumption by critics that it is obsessed with the second to the exclusion of the first.

In Liberia, where it has just withdrawn its forces, the US, by putting some ships with marines off shore and a mere 200 peacekeepers on the ground, shored up the morale — and expertise — of a West African peace keeping force that so far has done a remarkable job in quieting the country and forestalling a likely new round of internecine strife.

The US, it may be forgotten, did the same thing in Macedonia in ex-Yugoslavia in 1992. Whilst war was boiling in Bosnia, Croatia and Serbia the US sent troops into still peaceful Macedonia and, working under the UN flag, reminded the local antagonists that they were being watched and at the same time bolstered those politicians inclined to compromise with the knowledge that the world was on their side.

The problems we now face are legion. Few pretend that rooting out Al Qaeda, putting Iraq on its feet or de-fanging Iran and North Korea are easy tasks. On the other hand if we cast our eye back to the way the world has changed since 1945 — decolonization, the emergence of new regional powers, the rapid spread of highly sophisticated military technology and the collapse of the Soviet empire — it is striking how many of these developments, all of which could have triggered major wars, progressed to a peaceful conclusion. A great amount of radical change has been negotiated and parlayed into a peaceful transition and a good part of that through the UN and other international institutions.

One good example is when the Baltic states finally broke away from the Soviet Union. Unsurprisingly they tried to refuse citizenship to the large numbers of native Russians that over the years had settled there. Moscow was highly angered and threatened to stop the withdrawals of Russian forces. Many on both sides talked of war.

The multilateral East-West body, the Organization for Security and Cooperation in Europe, led by Sweden, sent in high powered teams of negotiators and although the questions of troop withdrawals and citizenship for Russians living in the Baltic states were never formally linked a deal was arranged, not least because the western allies, infused with their own principles on the rights of minorities, could see the point of the Russian argument.

Good leadership can anticipate crises building up a military head of steam not only by the deft use of peacekeepers or international mediation but by taking a dispute to the World Court. Nigeria and Cameroon recently did this, avoiding a border dispute that risked seriously destabilizing the oil rich region of the Gulf of Guinea which provides a sizable 15% of US crude oil imports.

There had been military skirmishes between the two neighbours and, as the Nigerian president, Olusegun Obasanjo, told me in a recent interview, he faced strong pressure from his minister of defence to go to war. Obasanjo overruled the military and insisted that the dispute be taken to the International Court of Justice in The Hague. Last October the Court upheld the Cameroonian claim. There was much champing at the bit in Nigeria, but Obasanjo faced his critics down and a year later the issue is mute.

What has now become undeniably clear in retrospect — although many informed and sober people have been making the point for years — is that the preventive work the UN arms inspectors did after the 1991 Gulf War was so successful it should have avoided, in a normal, more self-disciplined, political atmosphere, the need for this year’s war. If it hadn’t been for September 11 it is highly doubtful that the US and British governments would have ever convinced themselves (for sure, their intelligence services would not have bent so much with the political wind) that war was necessary.

Prevention has a lot more going for it than pre-emption. We don’t have to choose between intervention and inaction. Why should we be forced to choose between two types of failure when there is a good alternative? “The problem” as Pierre Sane, a former secretary general of Amnesty International once said, “is not lack of early warning, but lack of early action”.

Many diplomats, aid workers and human rights activists with an ear to the ground know where the problems are building up to seismic proportions. Since 1945 the world has developed many tools for dealing with them. Contrary to the defeatist spirit of our current malaise there have been plenty of successes which should inspire us to face down the clarion calls for pre-emptive war and instead encourage us to step up the pace of preventive action.— Copyright Jonathan Power

“I thought this was a peace prize and not a prize in sexual ethics,” protested an irate Vatican official, giving voice to the widely held belief that this year’s Nobel Peace Prize went to an Iranian human-rights advocate rather than the dying Pope John Paul II because the selection committee disapproved of his hostility to homosexuality, abortion, contraception and women priests.

It may be true, for he must have been a leading contender: in the past year no western leader spoke out so firmly against the invasion of Iraq. But that is not what he will be remembered for.

The man really is dying. Reports that the Pope is now suffering from intestinal cancer in addition to Parkinson’s disease have not been denied by the Vatican, and one of the 31 new cardinals he recently created, Philippe Barbarin, archbishop of Lyons, bluntly said last month: “The Pope is reaching the end of the road. It’s a big responsibility for us. The Pope is in really bad shape.”

Since it will be almost impossible to say harsh things about him when he dies, perhaps we should take advantage of Karol Wojtyla’s 25th anniversary as pope to make a franker assessment of his impact on the Catholic church, which still commands the obedience of half the world’s Christians. It has been enormous. Almost single-handedly, he has expelled every trace of modernity from the institution.

The Catholic church on the eve of Wojtyla’s reign in 1978 was in the midst of a great and promising transformation. The rigid centralism that began with the 16th century counter-reformation and culminated in the declaration of papal infallibility in 1870 had been greatly undermined by the second Vatican council in 1962. Local languages replaced Latin in the mass, ritual was downgraded in favour of spiritual commitment, and the whole church was in theological ferment.

I did a sort of world tour of the Catholic church in 1978 as part of a documentary series on the likely impact of the new pope, and though I am not a believer it was a fascinating experience. In southern Africa, Catholics were playing a leading role in resistance to apartheid. In Latin America, the phenomenon of ‘liberation theology’ was reconnecting the church with the impoverished peasant millions of whom it had long ignored. In Europe and North America the old hierarchies were all under challenge, but especially the hierarchy of gender. Justice and equality were the themes, and the energy was astonishing.

Twenty-five years later, it is all gone. The collegiality promised by Vatican II is dead, replaced by top-down rule and a stream of decrees on faith and morals handed down by a pope who brooks no argument.

Nobody knows how many Catholic priests, nuns and lay theologians have been bullied into remaining silent under threat of excommunication, for neither their names nor their offences are made public, but the victims of what amounts to a new inquisition probably number in the thousands. And liberation theology has been crushed as heresy, leaving the Latin American poor to seek help and hope elsewhere.

The result is many Catholics in the developed world, especially women, have become internal emigres, clinging to their Catholic beliefs but silently rejecting the authority of a Vatican that, in the words of Swiss Catholic theologian Hans Kung (whose licence to teach theology in Catholic institutions was revoked by the Vatican in 1979), “has waged an almost spooky battle against modern women who seek a contemporary form of life, prohibiting birth control and abortion (even in the case of incest or rape), divorce, the ordination of women and the modernization of women’s religious orders.”

Latin America, home to almost half of the world’s Catholics, used to be a place where no other religion had a substantial presence. Under John Paul II, however, the re-imposition of the old Catholic hierarchies and orthodoxies has opened the door for evangelical Protestant sects, mostly Pentecostals and charismatics, to snap up millions of poor people who might once have been attracted to liberation theology. In a single generation evangelical Protestants have come from almost nothing to capture the loyalty of about a quarter of Latin America’s population, and they continue to grow very fast. This has happened almost entirely on John Paul II’s watch.

Then there is the fact that Wojtyla has created almost five hundred saints, more than all the other popes of the past four centuries together.

His candidates for sainthood often mirror his own deeply conservative beliefs, like the hundreds of Catholic ‘martyrs’ of the Spanish Civil War of 1936-39, all supporters of General Francisco Franco’s fascist revolt against the legitimate government, whom he beatified in 2000. Even devout Spanish Catholics were embarrassed.

Much of this has been obscured by the pope’s rock-star charisma and his constant touring, but John Paul II certainly does not leave the church as he found it. — Copyright

EDWARD SAID was a long-standing friend and comrade. I first met him more than 30 years ago at a seminar in New York and subsequently in different parts of the world. My diary of April 11, 2002, records: “Spoke at meeting at Columbia University chaired by Edward. He looks frail and exhausted. He asked me to feel his arm. All bones. Has lost so much weight, but his spirit is alive and is ultra-generous in his introduction ...”

Yet he always recovered enough strength to travel and speak all over the world. And this deceived us. For the past 10 years one had become so used to his illness, to his regular hospital visits, to his willingness to be experimented on with the latest drugs, to his refusal to accept defeat that we began to think he was indestructible.

Last year I met his doctor who told me that he could think of no medical explanation for his survival. It was Said’s indomitable spirit as a fighter that preserved him for so long. Slowly the monster was devouring his insides but we could not see the process. And so, when the cursed cancer finally claimed his life, the shock was awful.

By a strange irony, when I heard the news of his death in Sweden at the Goteborg Book Fair, I had spoken twice already that day and Palestine had figured prominently in these talks. I had been thinking of him, and one of his Swedish admirers asked about his health. Later, at a special meeting organized by his Swedish publishers, Ordfront, we paid tribute to the man and his work.

With Said’s death, the Palestinian nation has lost its most articulate voice in the northern hemisphere, a world where, by and large, the continuous suffering of the Palestinians is ignored. It was in this world — in the heart of the American academy to be precise — that Said lived and worked. And it was here that his controversial theses on culture and politics and the use of the western academy as an instrument of domination won him the admiration of some and the envious hate of many.

Soon after he told me of his illness, I suggested we record a long television interview for Channel Four in Britain. As we were being filmed walking on the Columbia campus, where his large office was referred to by friends and enemies as the “West Bank”, a number of his colleagues passed by.

Smiles and pleasantries were exchanged. The minute they were out of sight, Said would provide me with a vicious portrait of most of them. Alas, an image-obsessed director had switched off the sound and so the choice invective has not been preserved for posterity. Hatred to be effective must be pure and Said gave as good as he got.

It was after that interview, in which he spoke openly about his parents that I pressed him to write his memoirs. He said the leukemia had concentrated his mind and he had already begun to make notes on the project that later became ‘Out of Place’.

It was the 1967 war that brought politics into his life and made him assert his identity as a Palestinian Arab. His father, a Palestinian Christian, had migrated to the United States, got citizenship and fought in the World War I. Subsequently he returned to Jerusalem where Edward was born in 1935.

Contrary to his detractors, he never pretended to be a poverty-stricken Palestinian refugee. The family moved to Cairo where his father set up a successful stationery business, and Said was educated in an elite English-language school. He was named Edward after the Prince of Wales.

Despite his monarchism, the father sent his son not to Britain but to the US. It was Princeton and Harvard that nurtured Said’s love of literature and encouraged his intellectual development. Early influences were Vico and Auerbach. Gramsci came later. His first book, ‘Beginnings’, remains, in many ways, his most intellectually powerful work, though it was ‘Orientalism’ that established his name throughout the world.

He wrote it in 1978 when he was a member of the Palestinian National Council: the book reflects the polemical vigour of the activist and the passion of a cultural critic. The book spawned a whole academic discipline and while Said was undoubtedly touched and flattered by its success, he would often disclaim responsibility for his offspring. “How can anyone accuse me of denouncing ‘dead white males’ in the literary canon,” he would shout. “Everyone knows I love Conrad.”

He would then go through a list of post-modernist academics, with their stress on identity and a virulent hostility to narrative, and denounce each and all of them in turn. “Write it all down,” I once told him. “Why don’t you?” came the reply.

When ‘Culture and Imperialism’, a much more self-assured and relaxed work than ‘Orientalism’, was published in 1994 his critics became even more angry. There was a celebrated exchange with Ernest Gellner in the Times Literary Supplement. Later Gellner attempted a reconciliation of sorts, but Said was unforgiving.

The last four decades of his life were dominated by Palestine. Once, when I asked if the year 1917 meant anything to him, he replied without hesitation: “Yes, the Balfour Declaration.” He served on the Palestinian National Council, fell out with Arafat and denounced the Oslo Accords as a total capitulation. History vindicated his analysis. One of Arafat’s lieutenants, Nabil Shaath, asked to comment on Said’s criticisms of Oslo, replied: “He should stick to literary criticism. After all, Arafat would not deign to discuss Shakespeare.” But in reality the criticism hurt and, as the accords moved in the direction of history’s dustbin, Palestinians told each other that Said had been right.

His other love was music. I remember compelling him to play the piano when we were filming him in his apartment all those years ago. At first he resisted: the professionals might mock at his performance. Then he agreed. It was wonderful watching and listening to him. He played beautifully.

He wrote often on music for The Nation magazine and was a well-regarded authority on opera in a world dominated by bitchiness and sniping. He loved Wagner’s music. A few months ago I spoke to him about writing an introduction to Adorno’s study of Wagner which Verso Books wanted to reissue. He got very excited and promised to write it “if I’m still alive”. He never did.

I’m writing this in Naples where many writers are present for the Premio Napoli awards. By coincidence I encountered an Israeli novelist, Avraham Jeshua. I could not accompany them on a boat trip round the Bay of Naples and said I had to write a tribute to a friend. When I mentioned Said’s name Jeshua exploded. “He sat in New York criticising us ... What does he know of conditions in Palestinian camps? ... He and Mahmud Darwish created trouble,” etc. I replied harshly, but in a way the exchange was quite reassuring. Edward Said has many lives ahead of him.

The writer is a well-known author and political activist.